Serbia sets scene for 500MW wind push

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Richard Heap
August 19, 2016
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This content is from our archive. Some formatting or links may be broken.
Serbia sets scene for 500MW wind push

It is three years since the government of Serbia decided to open the country to investment in 500MW of wind farms. In the last nine months it has taken big strides to make it happen.

In November, developer MK Fintel Wind opened the 9.9MW Kula project, which is Serbia’s first wind farm. Serbian energy minister Aleksandar Antic used the event to talk up interest from investors, developers and manufacturers in a market where growth was just starting. It followed this by adopting a renewables-friendly Energy Law on 30 December.

There was a further indication of this interest from developers in April, when the Ministry of Mining & Energy revealed that it had secured enough projects to meet this 500MW. This includes the 158MW Cibuk 1 project by Continental Wind Partners; the 106MW Kovacica scheme by Elektrawinds K-Wind; and the 102MW Plandiste 1 by a subsidiary of Serbian oil and gas company Naftna Industrija Srbije. This should help fan investor interest.

And then, in mid-June, the government enacted a series of new laws to boost the confidence of renewable energy investors. One of the most important of these is the Model PPA Decree, which sets the term of government PPAs at 12 years and the level of feed in tariffs at around €0.092/MWh.

Kristof Ferenczi, partner in the energy department at eastern Europe and central Asia law firm Kinstellar, says that this has given confidence to investors because it shows they will be able to get attractive returns on their investments.

In addition, the government introduced an Incentives Measures Decree for incentives related to high-efficiency co-generation projects; and the PP Status Decree, which sets out requirements for power producers to gain special status for renewable projects.

So the developers are keen, and the government has put in place legislation that should make Serbia more attractive for investors. How long before this market really takes off?

This comes down to money, and how quickly the three projects identified earlier with over 100MW capacity can reach financial close and start on-site.

The largest of the three, Cibuk 1, requires total investment of around €290m, and gained the attention of investors including the European Bank for Reconstruction & Development; a subsidiary of German development bank KfW IPEX Bank; and state-backed Abu Dhabi investor Masdar. Continental Wind Partners has said work on the 57-turbine Cibuk 1 could start in early 2017. It would be one of Serbia’s first large privately-owned power projects.

Meanwhile, Serbian renewables advisor New Energy Solutions has said that it was in preliminary negotiations about financing for the €160m Kovacica wind farm, but did not say when these could complete. The project is set to use 38 General Electric turbines.

And details are even more scant about the long-talked-about Plandiste 1. But, in our view, one of these schemes will need to reach financial close and start on-site before more investors from established markets start to take Serbian wind seriously.

We will be keeping the closest eye on Cibuk 1. It is the only one of this trio that has given the names of interested investors, which are the development finance institutions that are keen to open up new markets; and has a tentative development timetable. This means it should be possible for it to reach financial close within six months.

If Serbia is to maintain its momentum then it needs a landmark project sooner rather than later.

It is three years since the government of Serbia decided to open the country to investment in 500MW of wind farms. In the last nine months it has taken big strides to make it happen.

In November, developer MK Fintel Wind opened the 9.9MW Kula project, which is Serbia’s first wind farm. Serbian energy minister Aleksandar Antic used the event to talk up interest from investors, developers and manufacturers in a market where growth was just starting. It followed this by adopting a renewables-friendly Energy Law on 30 December.

There was a further indication of this interest from developers in April, when the Ministry of Mining & Energy revealed that it had secured enough projects to meet this 500MW. This includes the 158MW Cibuk 1 project by Continental Wind Partners; the 106MW Kovacica scheme by Elektrawinds K-Wind; and the 102MW Plandiste 1 by a subsidiary of Serbian oil and gas company Naftna Industrija Srbije. This should help fan investor interest.

And then, in mid-June, the government enacted a series of new laws to boost the confidence of renewable energy investors. One of the most important of these is the Model PPA Decree, which sets the term of government PPAs at 12 years and the level of feed in tariffs at around €0.092/MWh.

Kristof Ferenczi, partner in the energy department at eastern Europe and central Asia law firm Kinstellar, says that this has given confidence to investors because it shows they will be able to get attractive returns on their investments.

In addition, the government introduced an Incentives Measures Decree for incentives related to high-efficiency co-generation projects; and the PP Status Decree, which sets out requirements for power producers to gain special status for renewable projects.

So the developers are keen, and the government has put in place legislation that should make Serbia more attractive for investors. How long before this market really takes off?

This comes down to money, and how quickly the three projects identified earlier with over 100MW capacity can reach financial close and start on-site.

The largest of the three, Cibuk 1, requires total investment of around €290m, and gained the attention of investors including the European Bank for Reconstruction & Development; a subsidiary of German development bank KfW IPEX Bank; and state-backed Abu Dhabi investor Masdar. Continental Wind Partners has said work on the 57-turbine Cibuk 1 could start in early 2017. It would be one of Serbia’s first large privately-owned power projects.

Meanwhile, Serbian renewables advisor New Energy Solutions has said that it was in preliminary negotiations about financing for the €160m Kovacica wind farm, but did not say when these could complete. The project is set to use 38 General Electric turbines.

And details are even more scant about the long-talked-about Plandiste 1. But, in our view, one of these schemes will need to reach financial close and start on-site before more investors from established markets start to take Serbian wind seriously.

We will be keeping the closest eye on Cibuk 1. It is the only one of this trio that has given the names of interested investors, which are the development finance institutions that are keen to open up new markets; and has a tentative development timetable. This means it should be possible for it to reach financial close within six months.

If Serbia is to maintain its momentum then it needs a landmark project sooner rather than later.

It is three years since the government of Serbia decided to open the country to investment in 500MW of wind farms. In the last nine months it has taken big strides to make it happen.

In November, developer MK Fintel Wind opened the 9.9MW Kula project, which is Serbia’s first wind farm. Serbian energy minister Aleksandar Antic used the event to talk up interest from investors, developers and manufacturers in a market where growth was just starting. It followed this by adopting a renewables-friendly Energy Law on 30 December.

There was a further indication of this interest from developers in April, when the Ministry of Mining & Energy revealed that it had secured enough projects to meet this 500MW. This includes the 158MW Cibuk 1 project by Continental Wind Partners; the 106MW Kovacica scheme by Elektrawinds K-Wind; and the 102MW Plandiste 1 by a subsidiary of Serbian oil and gas company Naftna Industrija Srbije. This should help fan investor interest.

And then, in mid-June, the government enacted a series of new laws to boost the confidence of renewable energy investors. One of the most important of these is the Model PPA Decree, which sets the term of government PPAs at 12 years and the level of feed in tariffs at around €0.092/MWh.

Kristof Ferenczi, partner in the energy department at eastern Europe and central Asia law firm Kinstellar, says that this has given confidence to investors because it shows they will be able to get attractive returns on their investments.

In addition, the government introduced an Incentives Measures Decree for incentives related to high-efficiency co-generation projects; and the PP Status Decree, which sets out requirements for power producers to gain special status for renewable projects.

So the developers are keen, and the government has put in place legislation that should make Serbia more attractive for investors. How long before this market really takes off?

This comes down to money, and how quickly the three projects identified earlier with over 100MW capacity can reach financial close and start on-site.

The largest of the three, Cibuk 1, requires total investment of around €290m, and gained the attention of investors including the European Bank for Reconstruction & Development; a subsidiary of German development bank KfW IPEX Bank; and state-backed Abu Dhabi investor Masdar. Continental Wind Partners has said work on the 57-turbine Cibuk 1 could start in early 2017. It would be one of Serbia’s first large privately-owned power projects.

Meanwhile, Serbian renewables advisor New Energy Solutions has said that it was in preliminary negotiations about financing for the €160m Kovacica wind farm, but did not say when these could complete. The project is set to use 38 General Electric turbines.

And details are even more scant about the long-talked-about Plandiste 1. But, in our view, one of these schemes will need to reach financial close and start on-site before more investors from established markets start to take Serbian wind seriously.

We will be keeping the closest eye on Cibuk 1. It is the only one of this trio that has given the names of interested investors, which are the development finance institutions that are keen to open up new markets; and has a tentative development timetable. This means it should be possible for it to reach financial close within six months.

If Serbia is to maintain its momentum then it needs a landmark project sooner rather than later.

It is three years since the government of Serbia decided to open the country to investment in 500MW of wind farms. In the last nine months it has taken big strides to make it happen.

In November, developer MK Fintel Wind opened the 9.9MW Kula project, which is Serbia’s first wind farm. Serbian energy minister Aleksandar Antic used the event to talk up interest from investors, developers and manufacturers in a market where growth was just starting. It followed this by adopting a renewables-friendly Energy Law on 30 December.

There was a further indication of this interest from developers in April, when the Ministry of Mining & Energy revealed that it had secured enough projects to meet this 500MW. This includes the 158MW Cibuk 1 project by Continental Wind Partners; the 106MW Kovacica scheme by Elektrawinds K-Wind; and the 102MW Plandiste 1 by a subsidiary of Serbian oil and gas company Naftna Industrija Srbije. This should help fan investor interest.

And then, in mid-June, the government enacted a series of new laws to boost the confidence of renewable energy investors. One of the most important of these is the Model PPA Decree, which sets the term of government PPAs at 12 years and the level of feed in tariffs at around €0.092/MWh.

Kristof Ferenczi, partner in the energy department at eastern Europe and central Asia law firm Kinstellar, says that this has given confidence to investors because it shows they will be able to get attractive returns on their investments.

In addition, the government introduced an Incentives Measures Decree for incentives related to high-efficiency co-generation projects; and the PP Status Decree, which sets out requirements for power producers to gain special status for renewable projects.

So the developers are keen, and the government has put in place legislation that should make Serbia more attractive for investors. How long before this market really takes off?

This comes down to money, and how quickly the three projects identified earlier with over 100MW capacity can reach financial close and start on-site.

The largest of the three, Cibuk 1, requires total investment of around €290m, and gained the attention of investors including the European Bank for Reconstruction & Development; a subsidiary of German development bank KfW IPEX Bank; and state-backed Abu Dhabi investor Masdar. Continental Wind Partners has said work on the 57-turbine Cibuk 1 could start in early 2017. It would be one of Serbia’s first large privately-owned power projects.

Meanwhile, Serbian renewables advisor New Energy Solutions has said that it was in preliminary negotiations about financing for the €160m Kovacica wind farm, but did not say when these could complete. The project is set to use 38 General Electric turbines.

And details are even more scant about the long-talked-about Plandiste 1. But, in our view, one of these schemes will need to reach financial close and start on-site before more investors from established markets start to take Serbian wind seriously.

We will be keeping the closest eye on Cibuk 1. It is the only one of this trio that has given the names of interested investors, which are the development finance institutions that are keen to open up new markets; and has a tentative development timetable. This means it should be possible for it to reach financial close within six months.

If Serbia is to maintain its momentum then it needs a landmark project sooner rather than later.

It is three years since the government of Serbia decided to open the country to investment in 500MW of wind farms. In the last nine months it has taken big strides to make it happen.

In November, developer MK Fintel Wind opened the 9.9MW Kula project, which is Serbia’s first wind farm. Serbian energy minister Aleksandar Antic used the event to talk up interest from investors, developers and manufacturers in a market where growth was just starting. It followed this by adopting a renewables-friendly Energy Law on 30 December.

There was a further indication of this interest from developers in April, when the Ministry of Mining & Energy revealed that it had secured enough projects to meet this 500MW. This includes the 158MW Cibuk 1 project by Continental Wind Partners; the 106MW Kovacica scheme by Elektrawinds K-Wind; and the 102MW Plandiste 1 by a subsidiary of Serbian oil and gas company Naftna Industrija Srbije. This should help fan investor interest.

And then, in mid-June, the government enacted a series of new laws to boost the confidence of renewable energy investors. One of the most important of these is the Model PPA Decree, which sets the term of government PPAs at 12 years and the level of feed in tariffs at around €0.092/MWh.

Kristof Ferenczi, partner in the energy department at eastern Europe and central Asia law firm Kinstellar, says that this has given confidence to investors because it shows they will be able to get attractive returns on their investments.

In addition, the government introduced an Incentives Measures Decree for incentives related to high-efficiency co-generation projects; and the PP Status Decree, which sets out requirements for power producers to gain special status for renewable projects.

So the developers are keen, and the government has put in place legislation that should make Serbia more attractive for investors. How long before this market really takes off?

This comes down to money, and how quickly the three projects identified earlier with over 100MW capacity can reach financial close and start on-site.

The largest of the three, Cibuk 1, requires total investment of around €290m, and gained the attention of investors including the European Bank for Reconstruction & Development; a subsidiary of German development bank KfW IPEX Bank; and state-backed Abu Dhabi investor Masdar. Continental Wind Partners has said work on the 57-turbine Cibuk 1 could start in early 2017. It would be one of Serbia’s first large privately-owned power projects.

Meanwhile, Serbian renewables advisor New Energy Solutions has said that it was in preliminary negotiations about financing for the €160m Kovacica wind farm, but did not say when these could complete. The project is set to use 38 General Electric turbines.

And details are even more scant about the long-talked-about Plandiste 1. But, in our view, one of these schemes will need to reach financial close and start on-site before more investors from established markets start to take Serbian wind seriously.

We will be keeping the closest eye on Cibuk 1. It is the only one of this trio that has given the names of interested investors, which are the development finance institutions that are keen to open up new markets; and has a tentative development timetable. This means it should be possible for it to reach financial close within six months.

If Serbia is to maintain its momentum then it needs a landmark project sooner rather than later.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.